The following study is based on the assessment of the financial performance of the Boral Ltd and Adelaide Brighton Ltd by measuring the profitability of these companies for a period of ten years. The study will further analyse the financial performance of the companies throughout the period of ten years in order to determine the success and failure of these companies.
The report will additionally gauge into the comparative results derived by using the ratio analysis tools to comment on the overall strength of the companies undertaken for research purpose. On the other hand, of the report a graphical representation of the numerous variables derived from the financial statement of both the companies will be provided. Additionally, descriptive statistics with correlation coefficient will be performed on the number of variables extracted from the data of the financial report.
Boral ltd is the multinational company that is dealing in building and constructions materials. The company was founded in Australian and its operations extends to United States and Asia. The strategic intent of Boral Ltd is to be a value and market determined, being focussed towards building and constructions material supplier. The objective of the company is to exceed the weighted average cost of capital with the help of sustainable methods through the building cycle.
The strategic priorities of Boral Ltd is to render improved financial results in the comparable markets. Additionally the strategic intent and object of Boral Ltd is to provide greater returns to the shareholder and achieving superior returns to the shareholder. The operations priorities of Boral Ltd is to constantly implement the best practices for achieving excellent performance including the areas of operational and commercial excellence (Boral.com.au, 2017). The mission of Boral Ltd is to build a business portfolio having balanced traditional and innovative products with more flexible structure of cost.
Adelaide Brighton Ltd on the other hand is the leading Australian integrated construction material and lime producing company. The operations of the company is engaged in the manufacturing and supply of the variety of constructions material products, infrastructure and processing of minerals into the markets throughout the country. The principle objective of the Adelaide Brighton Ltd consists of the production, importation and distribution of the cement, industrial lime, concrete of premixed nature, cement and concrete products (Adelaidebrighton.com.au, 2017). Adelaide Brighton Ltd continues to impose the long-term strategy of growing the shareholder returns in three key areas. These includes improvement in the operational efficiency of the business and cost reductions.
The company aims to achieve growth in the business of lime by aiming to supply its resources in the areas of Western and Southern Australia. Adelaide Brighton Ltd is focuses on the relevant and vertical integration in the downstream aggregates, masonry, concrete and logistics. In applying the strategies of growth, Adelaide Brighton Ltd aims to pay special attention on the business operations and corporate level towards certain kind of important drivers for the long-term creation of shareholder value.
Boral Ltd:
Return On Assets:
|
Boral Ltd |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
|
Return on Assets |
5.49% |
5.67% |
2.38% |
0.69% |
3.28% |
2.79% |
4.83% |
1.74% |
4.91% |
4.90% |
Formula:
|
Return On Assets Ratio |
Net Income Before Interest and Tax |
|
Total Assets |
Figure 1: Return on Assets
(Source: As Created by Author)
|
Boral Ltd |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
|
Return on Investment |
3.45% |
2.73% |
0.51% |
-1.15% |
2.02% |
1.85% |
2.27% |
2.23% |
3.13% |
3.16% |
Formula:
|
Return On Investment |
Net Profit |
|
Investment Capital |
Figure 2: Return on Investment
(Source: As Created by Author)
|
Boral Ltd |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
|
Return on Equity |
5.58% |
8.24% |
5.02% |
-3.37% |
5.85% |
5.49% |
-6.4% |
5.21% |
7.48% |
7.28% |
Formula:
|
Return on Equity |
Net Income |
|
Shareholders’ Equity |
Figure 3: Return on Equity
(Source: As Created by Author)
|
Boral Ltd |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
|
10.81% |
8.00% |
4.83% |
1.36% |
5.65% |
5.64% |
-6.85% |
3.63% |
8.19% |
8.06% |
Formula:
|
Gross Profit Margin |
Gross Profit |
|
Revenue |
Figure 4: Gross Profit Margin
(Source: As Created by Author)
|
Boral Ltd |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
|
Net Profit Margin |
5.86% |
4.68% |
2.92% |
-2.01% |
3.57% |
3.74% |
-4.07% |
3.89% |
5.98% |
5.94% |
Formula:
|
Net Profit Margin |
Net Profit |
|
Total Revenue |
Figure 5: Net Profit Margin
(Source: As Created by Author)
Return on Assets:
|
Adelaide Brighton Ltd |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
|
Return on Assets |
12.07% |
11.44% |
12.44% |
15.18% |
14.18% |
12.94% |
12.79% |
12.80% |
15.56% |
13.96% |
Formula:
|
Return On Assets Ratio |
Net Income Before Interest and Tax |
|
Total Assets |
Figure 1: Return on Assets
(Source: As Created by Author)
Return on Investment:
|
Adelaide Brighton Ltd |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
|
Return on Investment |
6.29% |
6.00% |
6.80% |
8.75% |
7.51% |
6.91% |
6.84% |
6.94% |
8.41% |
7.64% |
Formula:
|
Return On Investment |
Net Profit |
|
Investment Capital |
Figure 2: Return on Investment
(Source: As Created by Author)
|
Adelaide Brighton Ltd |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
|
Return on Equity |
17.11% |
17.72% |
15.46% |
16.60% |
15.74% |
15.74% |
14.64% |
15.75% |
17.78% |
15.38% |
Formula:
|
Return on Equity |
Net Income |
|
Shareholders’ Equity |
Figure 3: Return on Equity
(Source: As Created by Author)
Gross Profit Margin:
|
Adelaide Brighton Ltd |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
|
Gross Profit Margin |
21.83% |
22.04% |
21.81% |
24.40% |
23.43% |
39% |
39.15% |
38.47% |
37.35% |
36.44% |
Formula:
|
Gross Profit Margin |
Gross Profit |
|
Revenue |
Figure 4: Gross Profit Margin
(Source: As Created by Author)
|
Adelaide Brighton Ltd |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
|
Net Profit Margin |
12.88% |
11.86% |
12.50% |
14.17% |
13.53% |
13.14% |
12.33% |
12.93% |
14.73% |
13.36% |
Formula:
|
Net Profit Margin |
Net Profit |
|
Total Revenue |
Figure 5: Net Profit Margin
(Source: As Created by Author)
The reported amount of revenue for Boral Ltd declined by 2% on the prior year and this reflected an impact on the entire year of equity accounting of the company CSR Bricks Joint Venture after the formation on 1st May 2015. On analysing the financial performance of Boral Ltd it can be stated the revenue derived from the construction operations was relatively steady as the growth in the revenue in the USA helped in setting off the fall in construction material and cement (Boral.com.au, 2017). As evident from the financial result construction materials and cement revenue of Boral Ltd was down by 6% with fall in quarries, concrete and asphalt which ultimately reflected a fall in the major project activities of LNG in Queensland, Western Australia and Northern Australian regions.
The revenue derived from the building was lower by 23% from the financial year of 2015 however the revenues of Boral Ltd marginally increased by 1% following the adjustment from the equity accounting of the Boral CSR Bricks. The revenues from the Gypsum increased by 10% on the prior year, which was mainly due to the growth in the premium plasterboard sales and similar products. The analysis lay down that the net profit increased by 8% over the previous year and the improvement was mainly because of the 12% increase in the Earnings before interest and tax (Boral.com.au, 2017). The net profit margin over the year has been steady with company reporting a negative net profit of (2.01) for the financial year of 2010. However, Boral Ltd significantly gained the net profit margin in the following year of 2011 to 3.57.
As evident from the analysis conducted on return on equity Boral Ltd reported amount of equity account income stood $59 million which represented 50% share of the after tax earnings from the full year joint venture in the USG Boral in the year 2016. This ultimately reflected an increase of $10 million for the year 2015 (Boral.com.au, 2017). The return on equity has been somewhat steady for Boral Ltd except for the year of 2010 where Boral Ltd reported a negative return on equity of (3.37) however, the company managed to gained in the following year of 2011 with return on equity standing 5.85. The return on equity for the financial year of 2015 and 2016 reflected a stronger growth of 7.48 and 7.28 respectively. The growth is primarily attributed to the underlying Earnings before interest and tax of $179 million which increased by $38 million on the financial year of 2015 because of the strong growth in the Australia. Boral Ltd continued penetration of premium and contiguous products with benefits of cost reductions.
Considering the performance of the return on return on investment, it can be stated that the Boral Ltd recorded an increase in the dividends received from the $35 million equity investment especially in the USG Boral Gypsym and the Boral CSR Bricks. The return on investment has been somewhat steady as there have been instances where Boral Ltd has reported a relatively higher return on investment of 3.45 for the year 2007. The company has maintained a positive trend of return on investment over the span of ten years however in the year 2010 Boral Ltd reported negative return on investment of -1.15 in the year 2010. In the following years of 2014 and onwards the return on investment gained more strength with dividends generated from the equity accounted investments.
On the other hand, Adelaide Brighton Ltd financial performance reported a net profit of 36.44% in the year 2016. The net profit margin for Adelaide Brighton Ltd has been steady over the span of 10 years with the company reporting a higher net profit margin of 14.17 in the year 2015 (Adelaidebrighton.com.au, 2017). However, in the following years Adelaide Brighton Ltd gained more strength in net profit with the company reporting a net profit margin of 14.73 and 13.36 in the subsequent year of 2015 and 2016. The net profit after tax increased by 3.1% despite the fall in sales by 20% in the Western Australia and Northern Territory.
The revenue derived from the business operations for the year $1,396.2 million, which was lower than 1.2% from the year 2015 because of the lower demand of cement from the residential and resources construction projects. However, it gained balance from the continuous strength in the sectors of residential and increase in the infrastructure projects in the eastern states of Southern Australia. Apart from the growth in the net profit margin, the Adelaide Brighton Ltd has continuously a strong gross profit margin over the last ten years with a highest gross margin of 39.15% in the year 2012 (Adelaidebrighton.com.au, 2017). The gross profit margin reported by Adelaide Brighton Ltd for the later part of the years 2015 and 2016 stood 37.35% and 36.44% respectively.
The growth in gross profit was due to the growth in earnings before interest and tax, which expanded by 1.6% in the year of 2015 to $257.7 million. Taking into the considerations of the return on invested Adelaide Brighton Ltd has recorded a consistent return on investment over the years. The return on investment for Adelaide Brighton Ltd went as high as 8.41% in the year 2015 and reported as low as 6.00% in the year 2008. The company reported that higher return on investment was primarily due to the contributions made from the long-term investments in aggregate and realisation of the long term vertical integration strategy turns out to be major contributor to the shareholders return. Adelaide Brighton Ltd has rendered a compound annual growth of 3.9% net profit after tax over the last five years (Adelaidebrighton.com.au, 2017).
A conclusion can be draw regarding the performance of the both the companies over the period of ten years. An assertion can be put forward that both Adelaide Brighton Ltd and Boral Ltd evenly match in terms of the financial growth reported. It can be stated that Boral Ltd has reported a better revenue and gross profit margin over the year and the company has been resilient during the cyclical nature of the construction markets. Conversely, Boral Ltd has been positively generated business revenue during the cyclical nature of the market. As it has been stated in the analysis that company has reported a rising trend of revenue with improvement in the net profit and gross profit ratio. Boral Ltd has maintained a positive trend of return on investment and return on equity over the span of ten years. Strategically Boral Ltd is better placed than Adelaide Brighton Ltd since the company has been successful in long-term strategy of cost reductions by attaining growth through vertical integration of quality aggregates during cyclic nature of construction markets.
Adelaide Brighton Ltd is considered as the largest producer of concrete in Australia and the company is regarded as one of the leading importer of the cement and clinker providing with strong competitive position in the market. Financially the company is regarded as the second largest cement supplier in Australia however the company has missed strong lime business. One of the best part of the Adelaide Brighton Ltd is that its cement, concrete and aggregates major part of the business with the company also performs its operating quarries in processing plants and distributions centres in most of the states and territories of Australia.
Adelaide Brighton Ltd is regarded as the long term value player over the years with consistency in delivering strong returns on equity to shareholders. The company is financial position of the Adelaide Brighton Ltd is better placed since the company has never reported a period of six months in this new millennium where it has not paid dividend to its shareholders (Adelaidebrighton.com.au, 2017). Over the last decade there has been a substantial increase in the share prices and between the year 2014 to 2016 the shares of the company double folded the amount with significant amount of yield dilution. Concerning the likes of big bank and Telstra, the yield seeking investors flocked the stock of Adelaide Brighton Ltd, which ultimately resulted in increase in the share price as high as 5.95%.
The continuous long-term strategy of Adelaide Brighton Ltd has resulted in 3.1% growth in the net profit after tax over the last five years. The company reported a growth in the net profit in spite of the decline of the sales volume by 20% in the regions of Western Australia and Northern Territories of Australia (Adelaidebrighton.com.au, 2017). However, there was a decline in the company net profit of the company in the year 2016 by 10.4% to $183.3 million, mainly because of the lower property profits yet the property contributed a net profit after tax of $7.9 million in comparison to $34.9 million in the year 2015. The financial position of the company improved in the business operations of concrete, aggregates, lime and joint venture.
The financial position can be stated to be stable as Adelaide Brighton Ltd reported full year dividends of 28.0 cents, which was fully franked. Financially Adelaide Brighton Ltd has been posting a strong generation of cash by achieving growth and assessing its opportunities.
Similar to Adelaide Brighton Ltd, Boral Ltd falls under the S7P/ASX 100 company that has on regular instance paid dividend to its shareholders (Adelaidebrighton.com.au, 2017). As an outcome of this, the institutional investors and super funds of self-managed nature have closely followed Boral Ltd. Boral Ltd is considered as the Australia’s largest supplier of building and materials of constructions having its operations in all the territories and states.
Boral Ltd has substantial amount of presence outside of Australia with 50% of its joint venture in the USG becoming the leading supplier of the plaster board and products of internal linings across the regions of Asia and Australasia. Considering the financial position of Boral Ltd the shares of the company spiked by around 50% in the financial year of 2016 however it declined and become out of favour following the delivery of the entire year results in the month of august and the company traded as low as $6.17 during the period of mid-September. As evident from the financial release of the company it has been noticed that the there has been a decline of 2% in the sales revenue in the previous year.
On the other hand, the revenue derived from the construction material and cement stood $2.91 billion with a sharp decline of 6% in Quarries, concrete and Asphalt which ultimately demonstrated a fall in the major activities of the project including the projects of the LNG. Considerably, the revenue reported by the company in the year 2016 has been significantly lower by 23% from the financial year of 2015. However, there has been an instance of increase by 10% in the underlying revenue of Gypsum, which was primarily driven by the increase in the sales of the plasterboard and adjacent products. Boral Ltd segment of USA earnings before interest and tax marked an improvement from the previous year performance to $44.2 million. The other factor that worked in the strengthening the financial position is the exposure to increase the activities of infrastructure in Australia. Boral Ltd is financially strongly placed in the supply of asphalt and other necessary infrastructure products.
Overall, an assertion can be bought forward that the Adelaide Brighton Ltd in the last decades has reported a better financial performance than Boral Ltd and the company is better placed financially. This is because the share prices of Adelaide Brighton Ltd have increased in greater folds than Boral Ltd since the dynamics surrounding the company is considered to be positive. The comparative financial study of both the companies provides an evidence that Adelaide Brighton Long-term value has strongly delivered returns on equity and there has been a substantial increase in revenue of the company in comparison to Boral Ltd, which has ultimately resulted in significant amount of yield dilution for the company.
Answer to 1:
Graphical Representation
Figure 6: Figure representing comparison of Sales
(Source: As Created by Author)
Figure 7: Figure representing comparison of NPAT
(Source: As Created by Author)
Figure 8: Figure representing comparison of COGS
(Source: As Created by Author)
Figure 9: Figure representing comparison of Total Assets
(Source: As Created by Author)
Figure 10: Figure representing comparison of Total Liabilities
(Source: As Created by Author)
Measures of Central tendency of Boral Ltd:
|
Boral Ltd |
|||||
|
Sales |
Cost of Goods Sold |
Net Profit After Tax |
Total Assets |
Total Liabilities |
|
|
Mean |
4666.39 |
3217.01 |
141.01 |
5811.93 |
2660.09 |
|
Standard Error |
109.65 |
83.82 |
51.94 |
119.57 |
101.08 |
|
Median |
4605.00 |
3103.95 |
174.80 |
5808.30 |
2660.45 |
|
Mode |
#N/A |
#N/A |
#N/A |
#N/A |
#N/A |
|
Standard Deviation |
346.73 |
265.08 |
164.25 |
378.12 |
319.64 |
|
Sample Variance |
120221.62 |
70265.46 |
26978.82 |
142974.44 |
102170.14 |
|
Kurtosis |
-1.04 |
1.59 |
1.50 |
0.30 |
-1.56 |
|
Skewness |
0.61 |
1.34 |
-1.51 |
0.47 |
-0.04 |
|
Range |
911 |
879 |
510.1 |
1289.7 |
884.7 |
|
Minimum |
4298 |
2927 |
-212 |
5209.4 |
2211 |
|
Maximum |
5209 |
3806 |
298.1 |
6499.1 |
3095.7 |
|
Sum |
46663.9 |
32170.1 |
1410.1 |
58119.3 |
26600.9 |
|
Count |
10 |
10 |
10 |
10 |
10 |
|
Confidence Level(95.0%) |
248.04 |
189.62 |
117.50 |
270.49 |
228.66 |
Measures of Central tendency of Adelaide Brighton Ltd:
|
Adelaide Brighton Ltd |
|||||
|
Sales |
Cost of Goods Sold |
Net Profit After Tax |
Total Assets |
Total Liabilities |
|
|
Mean |
1062.59 |
602.03 |
152.95 |
1547.92 |
481.57 |
|
Standard Error |
70.23 |
80.00 |
9.41 |
72.01 |
55.15 |
|
Median |
1047.65 |
660.70 |
151.30 |
1541.45 |
540.15 |
|
Mode |
#N/A |
#N/A |
#N/A |
#N/A |
#N/A |
|
Standard Deviation |
222.08 |
252.98 |
29.77 |
227.70 |
174.40 |
|
Sample Variance |
49320.42 |
63997.49 |
886.37 |
51848.09 |
30415.13 |
|
Kurtosis |
-0.57 |
0.37 |
-0.28 |
-1.72 |
-0.25 |
|
Skewness |
0.39 |
-1.06 |
0.47 |
0.14 |
-1.00 |
|
Range |
667.5 |
734.7 |
93.9 |
599.4 |
490.2 |
|
Minimum |
745.6 |
151.1 |
113.9 |
1239.1 |
166 |
|
Maximum |
1413.1 |
885.8 |
207.8 |
1838.5 |
656.2 |
|
Sum |
10625.9 |
6020.3 |
1529.5 |
15479.2 |
4815.7 |
|
Count |
10 |
10 |
10 |
10 |
10 |
|
Confidence Level(95.0%) |
158.87 |
180.97 |
21.30 |
162.89 |
124.76 |
The average sales of Boral Ltd for the period of ten years is $4666.39 with a variation of $346.73 per year. The sales for 50% of the period was below $4605.00.
The average COGS of Boral Ltd for the period of ten years is $3217.01 with a variation of $265.08 per year. The COGS for 50% of the period was below $3103.95.
The average Net Profit After Tax of Boral Ltd for the period of ten years is $141.01 with a variation of $164.25 per year. The NPAT for 50% of the period was below $174.80.
The average Total Assets for the period of ten years is $5811.93 with a variation of $378.12 per year. The Total Assets for 50% of the period was below $.5808.30
On the other hand, the average Total Liabilities of Boral Ltd for the period of ten years is $2660.09 with a variation of $319.64 per year. The Total Liabilities for 50% of the period was below $2660.45.
Taking into the considerations of the average sales of Adelaide Ltd for the period of ten years is $1062.59 with a variation of $222.08 per year. The sales for 50% of the period was below $1047.65.
The average COGS of Adelaide Ltd for the period of ten years is $602.03 with a variation of $252.98 per year. The COGS for 50% of the period was below $660.70.
The average Net Profit After Tax of Adelaide Ltd for the period of ten years is $152.95 with a variation of $29.77 per year. The NPAT for 50% of the period was below $29.77.
The average Total Assets for the period of ten years is $1547.92 with a variation of $227.70 per year. The Total Assets for 50% of the period was below $.1541.45
On the other hand, the average Total Liabilities of Adelaide Ltd for the period of ten years is $481.92 with a variation of $174.40 per year. The Total Liabilities for 50% of the period was below $540.15.
Correlation Coefficient of Boral Ltd
|
Boral Ltd |
||||||
|
Sales |
Cost of Goods Sold |
Net Profit After Tax |
Total Assets |
Total Liabilities |
Owners Equity |
|
|
Sales |
1 |
|||||
|
Cost of Goods Sold |
0.776 |
1 |
||||
|
Net Profit After Tax |
-0.306 |
-0.571 |
1 |
|||
|
Total Assets |
0.442 |
0.657 |
-0.022 |
1 |
||
|
Total Liabilities |
0.837 |
0.689 |
-0.273 |
0.596 |
1 |
|
|
Owners Equity |
-0.262 |
0.155 |
0.177 |
0.620 |
-0.257 |
1 |
Correlation Coefficient of Adelaide Ltd:
|
Adelaide Brighton Ltd |
||||||
|
Sales |
Cost of Goods Sold |
Net Profit After Tax |
Total Assets |
Total Liabilities |
Owners Equity |
|
|
Sales |
1 |
|||||
|
Cost of Goods Sold |
0.902 |
1 |
||||
|
Net Profit After Tax |
0.613 |
0.228 |
1 |
|||
|
Total Assets |
0.401 |
-0.022 |
0.901 |
1 |
||
|
Total Liabilities |
0.715 |
0.887 |
-0.034 |
-0.169 |
1 |
|
|
Owners Equity |
0.448 |
0.043 |
0.926 |
0.924 |
-0.252 |
1 |
The correlation coefficient (r = 0.776) between the Sales and Costs of Goods sold is positive, strong and linear for Boral Ltd.
The correlation coefficient (r = 0.902) between the Sales and Costs of Goods sold is positive, strong and linear for Adelaide Brighton Ltd.
The correlation coefficient (r = -0.306) between the Sales and NPAT is negative, weak and linear for Boral Ltd.
The correlation coefficient (r = 0.613) between the Sales and NPAT is positive, strong and linear for Adelaide Brighton Ltd.
The correlation coefficient (r = 0.442) between the Sales and Total Assets is positive, weak and linear for Boral Ltd.
The correlation coefficient (r = 0.401) between the Sales and Total Asset is positive, weak and linear for Adelaide Brighton Ltd.
The correlation coefficient (r = 0.837) between the Sales and Total Liabilities is positive, Strong and linear for Boral Ltd.
The correlation coefficient (r = 0.715) between the Sales and Total Liabilities is positive, strong and linear for Adelaide Brighton Ltd.
The correlation coefficient (r = -0.262) between the Sales and Owners Equity is negative, weak and linear for Boral Ltd.
The correlation coefficient (r = 0.448) between the Sales and Owners Equity is positive, weak and linear for Adelaide Brighton Ltd.
Least Square Regression of Boral Ltd:
|
Boral Ltd |
||||||||
|
SUMMARY OUTPUT |
||||||||
|
Regression Statistics |
||||||||
|
Multiple R |
0.3058 |
|||||||
|
R Square |
0.0935 |
|||||||
|
Adjusted R Square |
-0.0198 |
|||||||
|
Standard Error |
350.15 |
|||||||
|
Observations |
10 |
|||||||
|
ANOVA |
||||||||
|
df |
SS |
MS |
F |
Significance F |
||||
|
Regression |
1 |
101152.32 |
101152.32 |
0.825 |
0.390 |
|||
|
Residual |
8 |
980842.27 |
122605.28 |
|||||
|
Total |
9 |
1081994.59 |
||||||
|
Coefficients |
Standard Error |
t Stat |
P-value |
Lower 95% |
Upper 95% |
Lower 95.0% |
Upper 95.0% |
|
|
Intercept |
4757.40 |
149.33 |
31.857 |
0.000 |
4413.037659 |
5101.769055 |
4413.037659 |
5101.769055 |
|
Net Profit After Tax |
-0.65 |
0.71 |
-0.908 |
0.390 |
-2.284073064 |
0.993195018 |
-2.284073064 |
0.993195018 |
Least Square Regression of Adelaide Brighton Ltd:
|
Adelaide Brighton Ltd |
||||||||
|
SUMMARY OUTPUT |
||||||||
|
Regression Statistics |
||||||||
|
Multiple R |
0.6133 |
|||||||
|
R Square |
0.3761 |
|||||||
|
Adjusted R Square |
0.2981 |
|||||||
|
Standard Error |
186.05 |
|||||||
|
Observations |
10 |
|||||||
|
ANOVA |
||||||||
|
df |
SS |
MS |
F |
Significance F |
||||
|
Regression |
1 |
166955.66 |
166955.66 |
4.823 |
0.059 |
|||
|
Residual |
8 |
276928.09 |
34616.01 |
|||||
|
Total |
9 |
443883.75 |
||||||
|
Coefficients |
Standard Error |
t Stat |
P-value |
Lower 95% |
Upper 95% |
Lower 95.0% |
Upper 95.0% |
|
|
Intercept |
362.87 |
324.00 |
1.120 |
0.295 |
-384.265 |
1110.013 |
-384.265 |
1110.013 |
|
Net Profit After Tax |
4.57 |
2.08 |
2.196 |
0.059 |
-0.22884 |
9.378444 |
-0.22884 |
9.378444 |
The regression equation of net profit on sales for Boral Ltd is given by the equation :
Sales = 4757.40 – 0.65*Net Profit
Thus, it can be interpreted that with unit increase in net profit the sales decreases by $0.65.
Moreover, 9.35% of the variability in sales can be predicted from the net profit of the Boral Ltd.
The regression equation of net profit on sales for Adelaide Brighton Ltd is given by the equation :
Sales = 362.87 + 4.57*Net Profit
Thus, it can be interpreted that with unit increase in net profit the sales increases by $4.57.
Moreover, 37.61% of the variability in sales can be predicted from the net profit of Adelaide Brighton Ltd.
Time Series Equation:
Boral Ltd:
Figure 11: Figure representing comparison of Time Series Equation of Boral Ltd
(Source: As Created by Author)
Adelaide Brighton Ltd:
Figure 12: Figure representing comparison of Time Series Equation of Adelaide Brighton Ltd
Source; (As Created by Author)
The sales trend for Boral Ltd can be expressed by the equation
Sales = 63.836*T+5017.5
Therefore, the sales for Boral Ltd 2017 can be predicted as
Sales = 63.836*11+5017.5 = 5719.7
Therefore, for the sales for 2018 can be predicted as
Sales = 63.836*12+5017.5 = 5783.53
The sales trend for Adelaide Brighton Ltd can be expressed by the equation
Sales = 33.821*T+876.57
Therefore, for the sales for 2017 can be predicted as
Sales = 33.821*11+876.57 = 1248.6
Therefore, for the sales for 2018 can be predicted as
Sales = 33.821*12+876.57 = 1282.42
The COGS trend for Boral Ltd can be expressed by the equation
COGS = 4.9473*T+3244.2
Therefore, the COGS for the year 2017 for Boral Ltd can be predicted as
COGS = 4.9473*11+3244.2 = 3298.62
Therefore, the COGS for the year 2018 for Boral Ltd can be predicted as
COGS = 4.9473*12+3244.2 = 3303.57
The COGS trend for Adelaide Brighton Ltd can be expressed by the equation
COGS = 3.6261*T+582.09 =
Therefore, the COGS for the year 2017 for Adelaide Brighton can be predicted as
COGS = 3.6261*11+582.09 = 621.977
Therefore, the COGS for the year 2018 for Adelaide Brighton can be predicted as
COGS = 3.6261*12+582.09 = 625.603
The NPAT trend for Boral Ltd can be expressed by the equation
NPAT = 7.8758*T+101.75 =
Therefore, the COGS for the year 2017 for Boral Ltd can be predicted as
NPAT = 7.8758*11+101.75 = 188.384
Therefore, the COGS for the year 2018 for Boral Ltd can be predicted as
NPAT = 3.6261*12+582.09 = 196.26
The NPAT trend for Adelaide Brighton Ltd can be expressed by the equation
NPAT = 9.1618*T+102.56 =
Therefore, the Adelaide Brighton Ltd for the year 2017 for Boral Ltd can be predicted as
NPAT = 9.1618*11+102.56 = 203.34
Therefore, the Adelaide Brighton Ltd for the year 2018 for Boral Ltd can be predicted as
NPAT = 9.1618*12+102.56 =212.502
The Taxes trend for Boral Ltd can be expressed by the equation
Taxes = 2.8842*T+156.87 =
Therefore, the Taxes for the year 2017 for Boral Ltd can be predicted as
Taxes = 2.8842*11+156.87 = 188.596
Therefore, the Taxes for the year 2018 for Boral Ltd can be predicted as
Taxes = 2.8842*12+156.87 =191.48
The Taxes trend for Adelaide Brighton Ltd can be expressed by the equation
Taxes = 4.1642*T+31.407 =
Therefore, the Adelaide Brighton Ltd for the year 2017 can be predicted as
Taxes = 4.1642*11+31.407 = 77.213
Therefore, the Adelaide Brighton Ltd for the year 2018 can be predicted as
Taxes = 4.1642*12+31.407 = 81.377
The Total Assets trend for Boral Ltd can be expressed by the equation
Total Assets = 25.033*T+5674.2 =
Therefore, the Total Assets for the year 2017 for Boral Ltd can be predicted as
Total Assets = 25.033*11+5674.2 = 5949.56
Therefore, the Total Assets for the year 2018 for Boral Ltd can be predicted as
Total Assets = 25.033*12+5674.2 = 5974.6
The Total Assets trend for Adelaide Brighton Ltd can be expressed by the equation
Taxes = 72.719*T+1148.00=
Therefore, the Total Assets Adelaide Brighton Ltd for the year 2017 can be predicted as
Total Assets = 72.719*11+1148.00=1947.91
Therefore, the Total Assets Adelaide Brighton Ltd for the year 2018 can be predicted as
Total Assets = 72.719*12+1148.00= 2020.63
The Total Liabilities trend for Boral Ltd can be expressed by the equation
Total Liabilities = 63.836*T+5017.5 =
Therefore, the Total Liabilities for the year 2017 for Boral Ltd can be predicted as
Total Liabilities = 63.836*11+5017.5 = 5719.7
Therefore, the Total Liabilities for the year 2018 for Boral Ltd can be predicted as
Total Assets = 63.836*12+5017.5 = 5783.53
The Total Liabilities trend for Adelaide Brighton Ltd can be expressed by the equation
Total Liabilities = 10.764*T+540.77 =
Therefore, the Total Liabilities for the year 2017 for Adelaide Brighton Ltd can be predicted as
Total Liabilities = 10.764*11+540.77 = 659.174
Therefore, the Total Liabilities for the year 2018 for Adelaide Brighton Ltd can be predicted as
Total Liabilities = 10.764*12+540.77 = 669.938
The Owners Equity trend for Boral Ltd can be expressed by the equation
Owners’ Equity = 63.836*T+5017.5 =
Therefore, the Owners Equity for the year 2017 for Boral Ltd can be predicted as
Owners’ Equity = 63.836*11+5017.5 =
Therefore, the Owners Equity for the year 2018 for Boral Ltd can be predicted as
Owners’ Equity = 63.836*12+5017.5 = 5719.7
The Owners Equity trend for Adelaide Brighton Ltd can be expressed by the equation
Owners’ Equity = 61.073*T+641.69 = 5783.53
Therefore, the Owners Equity for the year 2017 for Adelaide Brighton Ltd can be predicted as
Owners’ Equity = 61.073*11+641.69 = 1313.49
Therefore, the Owners Equity for the year 2018 for Adelaide Brighton Ltd can be predicted as
Owners’ Equity = 61.073*12+641.69 = 1374.57
Conclusion:
The study can be concluded by stating that the report has gauged into the comparative results derived by using the ratio analysis tools to understand the overall strength of the companies undertaken for research purpose. On the other hand, of the report a graphical representation of the numerous variables derived from the financial statement of both the companies has been provided. Additionally, descriptive statistics with correlation coefficient has been performed on the number of variables extracted from the data of the financial report.
Reference
Boral’s Strategic Intent and Objectives. (2017). Boral.com.au. Retrieved 23 October 2017, from https://www.boral.com.au/article/boral_strategic_intent_objectives.asp#
Cement, A. (2017). Adelaide Brighton Cement. Adelaide Brighton Cement. Retrieved 23 October 2017, from https://www.adelaidebrighton.com.au/
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